If you have been paying attention, you may have heard a new buzzword in corporate crime – “red collar.” Although “white collar” and “blue collar” are a part of our everyday syntax, “red collar” crime is a term that has seen a lot of growth in recent years. Although white collar crimes and red collar crimes are similar, they do have some key differences. A white collar criminal can be, or turn into a red collar criminal.

White collar crime refers to when an individual uses their expertise to commit fraud or other corporate crimes. A common example would be an accountant cooking the books and pocketing company money. Red collar crime refers to oversights and white collar crimes that result in death. For instance, an architect cutting corners on a building that collapses and kills someone, would be considered a red collar crime. If that same architect had cut corners in order to embezzle those funds, there would be both white collar and red collar crime.

Top Behavioral Traits

There are many behavioral traits that are observed in all criminals. There are shared traits that can greatly affect the likelihood that someone will offend. Some of these traits include;

  • Weakness Exploitation – Both white collar criminals and red collar criminals look for weaknesses to exploit. These could be weaknesses in oversight, financial stability, or processes.

  • Power Orientation – Criminals will tend to choose power and control over self-discipline. Those that are lifetime criminals will often attempt to gain and utilize power over other individuals. They may feel weak or helpless, and attempt to remedy these feelings by gaining power.

  • Entitlement – Both white and red collar criminals may believe that they are entitled to something. They may not believe or follow the laws society has deemed appropriate. They express an attitude of ownership or having deserved the items they have stolen or money they have taken.

  • Social Identification – The criminal may not identify with a particular social group, or lack a social identity. This can cause them to feel isolated and alone.

  • Lack of Accountability – Criminals will often push the accountability for their crimes onto others. They may blame their superiors, the organization as a whole, or society for their crime.

  • Rationalization – The career criminal will find ways to rationalize their actions. They may attempt to portray their crime as morally acceptable for a variety of reasons.

Narcissism and White Collar Crime

Some of the traits often seen in white collar criminals could be construed as narcissistic in nature. They have exhibit a charismatic character, but have a need to control, will bully those who do not adhere to their wishes and have a deep-seated fear of losing their power and positions. This arrogant pride can manifest itself in the aforementioned behavioral traits, most notably weakness exploitation, entitlement and lack of accountability.

Psychopathy and White Collar Crime

According to Babiak (2007), criminals may display psychopathic tendencies. Furthermore, these tendencies may be considered favorable in the corporate world, making it easier for would-be criminals to attain positions where they can exploit their power. Their studies examined 203 corporate professionals, of which 77.8% were male. In psychopathy testing, their psychopathy scores were correlated with successfully communicating in both writing and presenting. It also showed correlation between psychopathy scores and following new proposals and possessing critical thinking skills.

White Collar Crime and Normalized Organizational Deviance

Most white collar criminals are thought to be “one time offenders.” They are often depicted as a white collar offender, who has offended for the first time, is middle-aged, well-educated and trusted by the organization. Their charitable works are often highlighted. These individuals may succumb to outside pressures such as having high personal debts,  or issues with substance abuse and addiction. This first offense creates a “slippery slope” effect where bad decisions compound and the individual is not aware of the effect of their actions. These individuals probably do not have a criminal record and would abstain from crime in other situations.

Some information that may be of use when identifying characteristics of white collar crime include;

  • A largest portion of white collar criminals are between the ages of 36 and 45. A study by the Association of Certified Fraud showed that in 2012, a total of 37.6% of all fraud cases were committed by individuals within that age range.

  • Older criminals typically take more. According to the Association of Certified Fraud, their 2012 case study showed that as criminals age – they tend to take larger sums of money. While individuals under the age of 26 showed a median loss of $25,000, individuals age 41-45 showed a median loss of $183,000, and those between the ages of 51-55 showed a median loss of $600,000. Older individuals may perceive that they have less to lose, leading to them taking more.

  • Corruption is the number one scheme in corporate crime. The Association of Certified Fraud showed that corruption was the leading scheme in both customer service fraud, as well as in purchasing fraud. Nearly 70% of all purchasing schemes involved corruption.

  • Only 6% of fraudsters have been found guilty of a fraud-related crime previously. These types of crimes are generally not a regular occurrence in the life of a criminal. This was found by the Association of Certified Fraud in their 2012 case study.

Side Effects of Profiling in an Office Environment

No matter how you look at it – there are some traits that are commonly shared among those that commit white collar and red collar crimes. While office profiling is generally frowned upon and seen as unfair, there are many things that need to be taken into account when attempting to build a profile for potential offenders. Remember – a company can successfully safeguard themselves from fraud and corruption without making a scene or making current employees feel uncomfortable. Open profiling could lead to dissatisfaction and low morale over time.

Conclusion

Both red collar crime and white collar crime share characteristics. Typically, they are committed by individuals that show the top behavioral traits, and display some level of narcissism or psychopathy. Creating a profile of likely offenders could potentially save companies hundreds of thousands of dollars in the long term, and safeguard them against future offences.

 

Resources

http://www.jaapl.org/content/37/4/538.full

The Psychological Profile of White-collar Offenders: Demographics, Criminal Thinking, Psychopathic Traits, and Psychopathology – Laurie L. Ragatz, William Fremouw and Edward Baker

http://www.corporatecrimereporter.com/redcollarcrime080306.htm

http://nzp.me/a/78/6MU

http://www.fraud-magazine.com/article.aspx?id=568

http://www.forbes.com/sites/joshuabrown/2011/05/16/us-investors-face-red-collar-crime-wave/